Thailand stocks fall, baht drops amid martial law
Martial law triggers the SET to suffer its biggest drop in nearly two weeks but some analysts say the army's move may bring about stability
Thailand's benchmark saw its biggest drop in nearly two weeks and the baht declined as the army imposed martial law nationwide amid political turmoil.
The key SET Index fell 1.1 per cent in Bangkok trading while the baht weakened 0.2 per cent versus the dollar, having earlier dropped as much as 0.6 per cent.
The army acted a day after data showed gross domestic product shrank 0.6 per cent in the first three months of this year compared with a year earlier.
The move is not a coup and people should not be concerned, army chief Prayuth Chan-Ocha said on local television, asking political groups to end protests that began in November and led to Yingluck Shinawatra's ouster as elected leader.
"Some foreign investors will dislike the martial law because it shows the situation is out of hand," said Prapas Tonpibulsak, chief investment officer at Krungsri Asset Management.
"The military's intervention may force politicians to be more willing to go to the negotiating table now."
Thailand's 10-year bonds fell, pushing yield up three basis points, or 0.03 of a percentage point, to 3.75 per cent. The baht traded at 32.53 per dollar, after falling to a one-week low of 32.66. Five-year credit-default swaps rose three basis points to 128 in Hong Kong.